Research Report on Cold Chain Logistics Industry in China, 2017-2021

The concept of cold chain logistics was introduced to China in 2008. In 2010, National Development and Reform Commission of China published Development Plan for Cold Chain Logistics of Agricultural Products. Later, some local governments also issued supportive policies, promoting the development of the cold chain logistics industry. Since the new Food Safety Law was issued in 2015, regulations on upstream and downstream food safety have been intensified, and therefore cold chain logistics further developed. Modifications to Food Safety Law and the publishing of Guidelines for Cold Chain Logistics Management of Medical Devices indicated more rigorous regulations on food safety of food and pharmaceuticals, promoting the development of the cold chain logistics industry. Cold chain logistics was also one of the priorities in the Thirteenth Five-year Plan (2016-2020). In terms of tax policies, in June 2016, Ministry of Finance and Ministry of Commerce jointly issued Notice on Central Finance’s Support for the Development of Cold Chain Logistics. In the Notice, 10 regions, including Shandong, Henan and Chongqing, were among the demonstration regions which received financial support for cold chain projects. Overall, the Chinese government supports the development of cold chain logistics.

In terms of application, fresh food e-commerce took off in recent years. Many e-commerce companies have entered the fresh food home delivery market, stimulating investment in cold chain logistics. In the capital market, Square Cold Chain Equipment was listed in the first half of 2016 and Zhejiang Dong Ri incorporated cold chain business, significantly leveling up the awareness of cold chain logistics.

CRI estimates that in 2016 in China, over 130 million tons of goods were transported and distributed via cold chain logistics and the market size was over CNY 130 billion. Projected CAGR of the cold chain logistics market for 2017-2021 will be over 15%.

CRI market research shows that there is huge room for cold chain to grow in China. In 2016, only 20% of fresh products were circulated through cold chain logistics, far below the 95% in developed countries such as Europe, America and Japan. About 20-30% of vegetables and fruit perished during circulation due to lack of cold chain, incurring over CNY 100 billion losses per year. Too many vegetables, fruits and other fresh products perish during transportation and storage, increasing the operational costs of fresh food retailers such as supermarkets and stores. The promotion of cold chain systems could reduce losses by 30%-50% for fresh food retailers, thereby increasing profits.